Lawyers: Midlands hospital could be forced to close

SUMTER, SC (WIS/AP) - Lawyers say a Sumter hospital could be forced to close if it's forced to pay a full judgment in a false Medicare claims case.

Attorneys for Tuomey Healthcare System say in court papers there would be "a public health disaster" in the area unless a stay is granted in the case.

"If a stay is not granted, Tuomey's ability to operate as a going concern will be immediately impaired," stated the motion. "Tuomey, and the public it serves, will suffer irreparable harm."

"If the Government is allowed to execute upon the judgment before Tuomey's right to appellate review is exhausted, Tuomey will be financially ruined and the people of Sumter and Shaw Air Force Base will suffer irreparable harm," continued the motion.

"In this case, denial of a stay would require Tuomey to immediately pay the entirety of the $237,454,195 judgment—a fiscal impossibility. The inevitable result will be that Tuomey as it currently operates—a charitable institution that provides care to a community that is both underserved and underinsured, taking all patients regardless of ability to pay—would cease to exist."

The federal government has agreed to refrain from taking any action to enforce the full judgment while the parties explore the possibility of a settlement.

"Under this forbearance agreement, Tuomey deposited $50 million into an escrow account, which is approximately $20 million more than Tuomey can afford to ultimately pay and remain in business."

The closest hospital to Tuomey is Clarendon Memorial Hospital, which is approximately 20 miles away. Other regional hospitals include Kershaw Health in Camden and Lake City Community Hospital in Florence.

Tuomey employs just under 1,700 people.

"Tuomey is still working toward a settlement and
hopeful that we can reach an agreement with the government," said Tuomey
Interim CEO Michael Schwartz.
"However, a settlement has to
include arrangements that leave Tuomey still in tact, serving the entire Sumter
community as it does today."

According to Sumter Economic Development, Tuomey is directly or indirectly responsible for 5,000 jobs in the Sumter area, which is roughly 12 percent of the total workforce.

"It is nearly impossible to overstate the importance of Tuomey Healthcare System on Sumter County," wrote Sumter Economic Development President Jay Schwedler in a June letter to Senior U.S. District Judge Margaret B. Seymour. "It is one of our oldest, most trusted local institutions and has helped people live better lives for 100 years.We wholeheartedly support Tuomey Healthcare System. It is more than just a local hospital. It is our major partner in the quest to increase the quality of life for our people.

Earlier this year, a federal jury found Tuomey signed doctors to lucrative, part-time contracts to ensure that they would get referral fees associated with those physicians' procedures - an illegal kickback under Medicare law.

Prosecutors said Tuomey collected $39 million in fraudulent Medicare claims between 2005 and 2009 based on those doctors' procedures.

According to its website, the 301-bed institution's active medical staff consists of 150 doctors.

Copyright 2014 WIS. All rights reserved. The Associated Press contributed to this report.